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With the date for budget 2019 is drawing nearer, most of the spokespersons for non-banking financial companies (NBFCs) are focusing on what more the government should do to address the acute pressures on the liquidity front that India’s NBFCs have been facing since the IL&FS crisis story uncovered last year. Various estimates suggest that NBFCs cater to 30-45 percent of the total credit in India.
While important steps have been taken to ensure NBFC funding is not affected, a lot more needs to be done to ensure NBFCs get back into the growth mode so that credit flow to the informal sector of the economy does not get choked. However, in this post, I will focus on three aspects relevant to NBFCs where I believe the budget can, and should, make a difference.